Creative Accounting

Creative accounting refers to the use of accounting techniques and principles to present financial data in a way that may be misleading or not entirely transparent, while still adhering to legal guidelines. Companies may employ these methods to improve their financial appearance, such as inflating profits or hiding expenses, making their performance seem better than it truly is. While not necessarily illegal, creative accounting can raise ethical concerns and affect stakeholders' trust. It highlights the importance of transparency and accountability in financial reporting, aiming to ensure that the true financial health of a business is accurately represented.